January 2010 Newsletter
Bangerter, Lund & Associates, Inc.
With the new Tax Season upon us, it’s time to get everything in order. We have mailed postcard reminders and are now mailing Tax Organizer packets. Please call us if you would like to receive one. We can mail the Organizer to you or send it directly to your email address.
For Your Information
W-2s: Your employer is required to mail your W-2 to the last address they have on file for you. If you have moved since receiving your last paycheck, you may need to contact the employer to update your mailing information. This year, employers have until February 1, 2010 to mail your W-2 to you. Please review your W-2 as soon as you receive it and contact the employer immediately to correct any errors.
1099s: The 1099 forms you receive which report your interest, dividends, and other income you have received in 2009 may appear different this year. With the escalating identity theft problems, the IRS is allowing banks, investment agencies, and other businesses to disguise all but the last four digits of your Social Security number on the forms they mail to you. Please review these forms upon receipt to verify your information is correct.
The First-Time Homebuyer Credit has been extended: The credit now includes first-time home purchases through April 30, 2010. If you purchase your home in 2010, you can claim the credit on your 2009 or 2010 tax return. Since the IRS now requires copies of your settlement statements, executed retail sales contract (for mobile home purchases), or the certificate of occupancy (for newly constructed residences) to be attached to your income tax return, you will not be able to file your return electronically in the year you claim the credit.
Medical Flex Spending, Cafeteria, or Section 125 accounts: Receipts for your 2009 expenditures are now due to your employer. If you still had money in your account as of December 31, 2009, contact your HR department. If your employer filed an election, you may have until February 15, 2010 to spend the remaining money in your account before you lose it.
New Rules and Developments in 2010
Required Minimum IRA Distributions: In 2009, this requirement was suspended. In 2010, the required minimum distribution (RMD) is back in effect. If you reach age 70 ½ this year, you are required to begin taking your distributions, even if you are not required to file an income tax return. The IRS allows a three-month grace period only for those turning 70 ½ in 2010. If 2010 is the year you turn 70 ½, you may postpone your first required minimum distribution until April 1, 2011. As a reminder to all individuals: If at any time you decide to withdraw more than your RMD amount, you are not allowed to apply the excess withdrawal amount to the RMD of a future year.
COBRA Subsidy Insurance: Are you currently receiving COBRA subsidy insurance due to an involuntary termination? When you become eligible for other health insurance (such as from a new job or Medicare eligibility), you are required to inform your plan as well as the IRS that you are no longer eligible for the COBRA health insurance premium subsidy. You can notify the IRS by calling 1-800-829-1040. The IRS imposes a 10% penalty plus mandatory repayment of premiums for those who have not notified their plan and the IRS of their eligibility for other health insurance.
Online Scams: The IRS has once again cautioned individuals, businesses and charities to beware of online identity theft and other scams that tend to increase during the filing season and continue thereafter. Such scams may be dressed to appear as communication coming from the IRS or the Treasury Department. Most scams appearing to involve IRS are identity theft schemes, according to the fact sheet. The aim is to trick recipients into revealing personal and financial information, such as passwords, PINs, and Social Security, bank account and credit card numbers. Please remember that generally, the IRS does not send unsolicited e-mails to taxpayers. Further, the IRS does not discuss tax account information with taxpayers via e-mail or use e-mail to solicit sensitive financial and personal information from taxpayers. The IRS does not request financial account security information, such as PIN numbers, from taxpayers.
Even if you believe the correspondence is legitimate, we strongly urge you to initiate your own communication. Do not reply to an e-mail or call the number or send information to the address listed in the e-mail. Instead, it is always safer to call the IRS directly at 1-800-829-1040 to discuss the information requested in the e-mail. You can get to the correct department to speak with a live representative and verify the validity of the e-mail.
Standard Mileage Rates reduced: The new rates are 50 cents per mile for business-related miles driven. Miles driven for medical or moving purposes can now be claimed at 16.5 cents each. The rate for miles driven in service of charitable organizations remains the same at 14 cents per mile. Remember, IRS rules require you to keep a complete and accurate log of your miles driven during the year in each of these scenarios to qualify to claim any vehicle expense.
Save Money on QuickBooks Products
If you are considering purchasing any 2010 QuickBooks software, services or supplies, please let us know. As a Certified QuickBooks ProAdvisor® we are entitled to discounts on these items and services for our clients who order through our office. We will place your order for you for free, and you pay only what we pay for the product.
As always, if you have any questions we are happy to answer them for you. Please give our office a call at (801) 397-1000 between 8am and 5pm, weekdays.
Sincerely,
Bangerter, Lund & Associates, Inc.
